Increase of market concentration, limitations in the distribution of medicines, development of parallel import and on-line pharmacies constitute the most important phenomena in the pharmaceutical sector which were analysed by UOKiK

 
In Poland there operate 115 producers of medicines, over 660 pharmaceutical wholesalers and over 12 000 pharmacies. Due to intensive development of this sector, the Office of Competition and Consumer Protection surveyed the pharmaceutical market, paying special attention to wholesale trade in medicines.

From among over 660 wholesalers operating on the Polish market, many operate within a small area or trade in only several products. There are five firms which play a significant role holding a 60% share of the market. What we can see here is gradual concentration which can lead to a decrease in the number of wholesalers to 35-40 within the next few years, similarly as in other European countries (e.g. 18 in Germany).

The number of pharmacies may decrease within the next few years as well. The reason behind the collapse of smaller retailers who will be unable to withstand strong competition is first of all the expansion of retailing chains and financial difficulties - half of the smaller retailers are indebted, the debts of one in five of them exceed the value of goods sold. Lack of competition in the form of a large number of pharmacies may in turn lead to the increase of the prices of medicines.

The limitations of competition which were noticed by UOKiK relate to the barriers to parallel import which has been allowed in Poland since 1 May 2004. Parallel import consists in buying a medicine in one of the EU Member States and selling it in another at a higher price, which is nevertheless lower than the price offered on a given market. The condition is, however, that the medicine is registered and was allowed to be traded in the country to which it is imported. Such activity may be beneficial to consumers, who gain access to innovative medicines at lower prices. Nevertheless, UOKiK found that several distributors request the wholesalers to conclude agreements limiting the possibility to distribute medicines in Poland.

On-line pharmacies are gaining popularity on the pharmaceutical market in Poland. Their number so far has reached about 70. Their operations may stimulate competition, as they sell medicines 10-15% cheaper than traditional pharmacies. The situation of Polish e-pharmacies is not regulated by law - their owners point out to the judgement of the European Court of Justice, which ruled that mail-order sale of medicines is allowed in the EU Member States. However, only the draft amended Act “Pharmaceutical Law” provides that traditional pharmacies are allowed to sell medicines available without prescription via mail-order. On that account traditional pharmacies are reluctant to mail-order sale of medicines. Furthermore, consumers cannot be sure whether the medicines offered on the Internet are completely safe. Pharmaceutical Chambers also make attempts to limit the activity of on-line pharmacies by filing requests to the Pharmaceutical Inspectorate for it to carry out inspections of the e-pharmacies. As a result, the Lekidodomu.pl e-pharmacy was closed down. These organisations claim that competition on the retail market should be limited on account of its specificity - they oppose price competition and promotional activities of pharmacies.

The conclusions of the report were reflected in UOKiK’s comments to the draft amendment to the Act “Pharmaceutical Law”. The Office expressed doubts as to the provisions introducing limitations to the number of pharmacy points and pharmacies that can operate within a given area. In the Office’s opinion, the planned solutions lead to the limitation of free competition which can result in smaller number of pharmacies and lesser degree of satisfaction of public needs. In consequence, consumers’ interests can be disturbed as they will have to buy medicines at high prices only because of smaller numer of pharmacies to choose from.

Additional information:
Małgorzata Cieloch, Spokesperson of UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. 22 55 60 106, 55 60 314
faks 22 826 11 86

E-mail [SCODE]bWNpZWxvY2hAdW9raWsuZ292LnBs[ECODE]